There. I said it. Though I’ve written about it before more diplomatically, I’m declaring it here and now as bluntly as I possibly can:
I HATE BUDGETS!
Why? Let me count the ways:
- Budgets are negative by nature. They're also a time suck. They never line up at the end of the month. They have us chasing pennies that don’t matter in the grand scheme of things.
- Budgets are only useful as a control mechanism to keep others accountable…to the penny. Want proof? The only people who like the Finance group in a given company are the people who are part of—wait for it—the Finance group!
- Budgets also suck all the fun out of decision making and spontaneity. We can’t follow our passions as they change because it’s not in the budget, unless we have another emergency budget meeting to shuffle things around.
- And, most importantly, budgets, like diet programs, don’t set us up for long-term success. Indeed, I would argue that those who are successful with budgets over the long term are successful despite their budgeting process.
The people who are great at saving money and at living debt free are just like the people who are successful at maintaining their health: they see it as a lifestyle.
Managing our consumption of food or money should not feel like punishment. It should be a thrill. It should energize us, empower us and fuel our success.
The carrot is always better than the stick.
What’s the carrot? I'm not talking about an external reward at the end of it (because that's not sustainable). The carrot is a focus on the positive. And a positive mindset comes from flipping the script. That means focusing on what positive money or food behaviours can help us do and how they make us feel, as opposed to what they prevent us from doing.
Here are some examples:
More in Savings & Less or No Debt = More Freedom to Do What I Want
Better Food = Better Mood, Better Health and Increased Sex Appeal*
*I dare anyone to tell me they don’t care about that last one, even a little bit.
Whether we’re thinking about money or food, if we focus on what we can’t do, we’re more likely to fail. If we focus on the positive, we’re more likely to develop sustainable habits and feel good about the choices we make.
Now, I’m not saying we shouldn’t set some goals or do some audits from time to time. It’s always good to see whether we’re following through on what we say or think we want.
Here’s some of the positive tracking that comes to mind:
- What’s happening to my pant/shirt size and weight? Have I gained/lost in a healthy way?
- What have I been buying foodwise? How much am I eating out? Am I happy with what I’ve been doing? (A good one here is the amount of tax paid on food. The higher the tax, the more crap we’re likely buying.)
- What’s happening to my/our net worth? Is it increasing as expected? How much is in fixed assets vs investments/cash?
- What have I/we been spending on? Are these purchases in line with my/our values? If not, why not? What opportunities could I/we take advantage of if I/we adjust personal behaviours?
The F2P household does keep track in both categories. But we do the tracking as a tally, not beforehand. And it’s been working for us.
We’re healthier than we were in our twenties (yes, you read that right) and we’ve repeatedly met or exceeded our financial goals…all without a budget.
Have we had hiccups over the years? Of course! I don’t know anyone who hasn’t. Do you?
I’ll keep focusing on what works which, for us, is to keep our eye on the prize:
To have the freedom to live our lives as we see fit.
That, in my book, blows any argument to maintain a budget right out of the water because that feeling is more effective in fuelling our behaviour than any daily or monthly reporting mechanism.
What about you? Do you think budgets are effective? Restrictive? Do they work for you? I’d love to hear your thoughts.